Thursday, September 28, 2017

SF Federal Reserve President Calls for Higher Inflation Targets

Central banks around the world should consider co-operating and co-ordinating efforts to change their 2% inflation targets, John Williams, president of the Federal Reserve Bank of San Francisco, told the Central Banking journal.

Williams believes 2% price inflation targets adopted by most ofthe developed world’s central banks will prove to be "suboptimal" over the next 10 years.

“There could be a mutual benefit for countries to change their price-stability policies together,” says Williams in the in-depth interview, published on September 27.

Williams didn't name a new specific target range in the interview but Central Banking had this to say:

One way to avoid resorting to unconventional policies so much in the future is for central banks to consider raising their inflation targets – perhaps to 4%...

The idea of targeting price inflation at any level is a bizarre concept co-opted by Keynesians in their unending desire to manipulate the economy. The first 2% inflation target, itself, was picked pretty much out of thin air with the help a New Zeland kiwi farmer--when New Zeland bankers wanted to keep monetary policy away from political influence.

A target of 4% would most assuredly result in an overshoot of the rate and mad convulsions in the economy. But Williams knows it is all about printing money for The Man.

2 comments:

We have the continuing Austrian/libertarian failure of getting average people to understand that inflation is a purposeful government program and not a unfathomable, mysterious and inevitable force of nature. ABCT or any anti-fed analysis will be meaningless until then.